Mitie unveils placing and £130m takeover

Support services group Mitie will look for further takeover targets after
confirming it would pay up to £130m for a rival facilities management group,
and raise at least £40m of fresh capital in an equity placing.

The FTSE 250 company will acquire Dalkia Technical Facilites Management – the UK arm of Dalkia – from French corporations EDF and Veolia for an initial £120m, with up to a further £10m payable depending on the group's performance this year.

MITIE Group

Ruby McGregor-Smith, chief executive of Mitie, said the deal was strategically important for the growth of the UK business, which, with a market capitalisation of £756m, lacks the scale of others in the sector such as Serco and Capita.

Mitie will pay the £120m in cash, drawing on its debt facilities, but the group said the proceeds of the equity placing, with 19m shares to be issued, would be used partly to refinance the debt drawn down for the deal.

Mitie management told analysts on Wednesday that the company would use its remaining cash to fund smaller acquisitions.

Mitie, an outsourcing business, has contracts as diverse as cleaning the Tower of London and supplying attendants to the at Tate Britain art gallery.